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Why Revenue Managers Should Ask For A Raise Now

Posted on September 4, 2018 at 4:05 pm

It’s budget season and right now hotels all over the world are planning their salary packages for next year. Only one thing is for certain, on average, Revenue Managers will be paid 20% less than their colleagues in Finance. That trend has been consistent for the last 15 years. If you are an RM and you are about to go into a salary review, here are the points I would use to argue for more equitable pay.

It is hard to argue with the notion that Revenue Management is now the most “mission critical” function in the hotel business. RM sits at the crossroads of the strategic and tactical decision making process for every single department in a hotel. This is why I believe that, next to the GM, Revenue Managers should be the highest paid employees in a hotel company. In fact, the RM’s job is so close in significance to the GM’s that, in most properties with limited resources, the GM is the RM. Today, if any hotel manager wants to make a pricing or promotion decision, they would be wise to consult with RM first, not only to validate their assumptions, but also to gain guidance on the feasibility of their plan. The same cannot be said about any other function. Let me give you some examples.

For Finance

Revenue Managers have taken the bulk of the significant revenue planning responsibility away from Finance. The DORM at most properties now has more forward looking data about demand patterns and guest behavior than the DOFA. Sure, at many properties, Finance is still off doing budgets and forecasts in a silo without the input of RM, but that type of planning is so disconnected from the everyday revenue strategy process that it is quickly becoming obsolete. Finance now takes the lead from RM in every process involving putting together predictive information that impacts financial planning.

For Marketing

In a digitized channel environment, the decision of when and where to publish promotions has to be very precise. Hotel marketing now relies on RM to dictate when a property’s demand cycle calls for promotions or additional impressions. In recent years, RM has taken much of the punch away from marketing. In the past, it was common to see the RM reporting into the head of Sales and Marketing. In years to come, it may not be unusual to see Marketing reporting to RM.